Plutocrats

PLUTOCRATS: THE RISE OF THE NEW GLOBAL SUPER-RICH AND THE FALL OF EVERYONE ELSE By Chrystia Freeland

Perhaps the most oft-reported and commented upon economic trend in recent years has been the growth of global inequality and the rise of the super-rich overclass indelibly dubbed by the Occupy Movement as the 1%. That said, most of what has been written on the subject has come from authors with a pronounced political agenda. Perhaps the chief virtue of Plutocrats is that Chrystia Freeland, despite being a financial reporter with access to many of the most exclusive corridors of power, does an admirable job staying relatively neutral in her informative account of the “new virtual nation of mammon.”

Wanting to avoid writing yet another chapter in the Lifestyles of the Rich and Famous, Freeland instead focuses on the culture, ideology, and personal biographies of the 0.1% (or UHNW, ultra high net worth, individuals) while considering the larger historical changes that have allowed for their spectacular rise. In brief, our Second Gilded Age has been the product of advances in technology, globalization, and deregulation, and the new Captains of Industry are predominantly “alpha geeks” (it is an almost exclusively male club) working in the fields of finance and the Internet. A subsidiary economy of “superstars” has evolved to service this elite, but for the most part the rise of the plutocrats has accompanied “the fall of everyone else.” At least in North America, the middle class has been running a lot harder the past several decades just to stand still.

The book is nicely arranged into chapters dealing with different themes (historical context, the culture of the plutocrats, the big business of rent seeking), and seamlessly integrates a lot of the latest academic research. And, as you would expect from Freeland, it’s a fun read, though better editing would have removed some repetition.

As far as having an angle of her own, Freeland’s critical conclusion focuses on the potential today’s economic inequality has for calcifying into a rigid new caste system. But despite observing that most of the super-rich are mainly individuals who found themselves by circumstance at the right place at the right time, and quoting a number of the more honest plutocrats who confess to the important role that luck has played in their success, she is reluctant to enter into a debate over the extent to which the current system can be called a meritocracy (the label she adopts). It is, for example, clear from Freeland’s reporting that the “best and the brightest” who caused the subprime mortgage meltdown take no personal responsibility for what happened, and for the most part she gives them a pass. Even more disappointing is the lack of any discussion of the social benefit of what the “working rich” do for a living. Many of today’s plutocrats see themselves as heroic figures akin to Ayn Rand’s John Galt, civilization’s necessary man. But Galt was an anachronism even at the time Rand wrote Atlas Shrugged, and it’s far from clear today what society owes to people like Bill Gates, Mark Zuckerberg, or billionaire hedge fund operators. To throw Galt’s words back at his wannabe successors: We don’t need you.

This, however, is to enter into the kind of political argument Freeland wants to avoid. And while that limits her book somewhat, it doesn’t diminish the real value of the often fascinating and well-informed analysis she provides.